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Dell aims to outpace industry, sees uncertainty
October 22, 2008 / 10:31 AM / in 9 years

Dell aims to outpace industry, sees uncertainty

SHANGHAI (Reuters) - Dell, the world’s second-biggest computer maker, expects to grow faster than the industry this year but its CEO said it is hard to say whether the global PC market will improve heading into the year-end.

<p>Michael Dell, chairman of the board and chief executive officer of Dell, delivers a speech during Dell Platinum Advisory Council in Shanghai October 22, 2008. Computer maker Dell has seen 30 percent sales growth in China and Hong Kong so far this year, in line with recent years, although it faces near-term uncertainties, a senior executive said on Wednesday. REUTERS/Nir Elias</p>

Michael Dell also told a briefing for reporters on Wednesday that the company had basically completed its previously announced job cuts, as it realigns its business to confront slowing demand.

The company had said it planned to cut 8,900 jobs, and that it would invest in infrastructure and acquisitions.

Dell also told Wednesday’s briefing that the company would use cash flow to make acquisitions.

Dell, which trails Hewlett-Packard in the computer sector, said last month that slow demand had spread from the United States to Europe and Asia, and had not rebounded as expected after the summer lull. In August, it posted a steep drop in second-quarter profit, saying that companies were becoming more conservative in spending.

But the chief executive said his company was performing well in unit shipments compared with the overall industry.

“For the first nine months of this year, according to IDC, Dell grew a few points faster than the overall industry for our unit growth. We expect for the full year, Dell will grow faster than the industry,” Michael Dell said.

<p>Michael Dell, chairman of the board and chief executive officer of Dell, delivers a speech during Dell Platinum Advisory Council in Shanghai October 22, 2008. Computer maker Dell has seen 30 percent sales growth in China and Hong Kong so far this year, in line with recent years, although it faces near-term uncertainties, a senior executive said on Wednesday. REUTERS/Nir Elias</p>

In China and Hong Kong, Dell has seen 30 percent sales growth so far this year, in line with recent years, although that fast-growing market also poses uncertainties.

“Honestly, how things will turn out next year is hard to say,” Alex Yung, Dell China vice president, told Reuters.

“We don’t know what kind of policy the Chinese government will come up with. If they continue to encourage domestic consumption, we wouldn’t be too worried,” he said.

“And also if the Chinese banks are not pulled too far (into global financial turmoil), we wouldn’t be too worried.”

The company’s 30 percent sales growth in China so far this year compares with 30 to 40 percent growth over the last five to six years, he added.

Yung told reporters later at a presentation that the company was seeing a mixed performance in various sectors of the market in China, with a particularly major impact on demand from export-oriented small companies, which have been hurt by the global economic slowdown.

“The consumer segment is doing very well,” he said.

“From the commercial side, we see continued good growth in the public sector, state-owned enterprises and also some of the global businesses that we have locally. We definitely see some challenges in the small and medium-sized businesses.”

Editing by Edmund Klamann

Our Standards:The Thomson Reuters Trust Principles.
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